Thursday, January 29, 2009

1982 Jobless Claims = 937,000 Jobless Claims in '09

For the week ending Jan. 24, the advance figure for seasonally adjusted initial claims was 588,000, an increase of 3,000 from the previous week's revised figure of 585,000. The 4-week moving average was 542,500, an increase of 24,250 from the previous week's revised average of 518,250.

MP: In December 2008, weekly initial claims (4-week moving average) averaged 549,062, compared to the January 2009 average of 526,625. That decline of -22,438 on a monthly average basis represents the largest monthly decline since November of 2005 (-50,425).

The chart above shows average monthly initial claims as a percent of the labor force, from January 1980 to January 2009. (For January 2009, I have assumed that the labor force remained at the same level as December 2008, 154.447 million). In previous posts (here and here), I have documented how the increasing size of the labor force over time distorts the frequent comparisons of today's jobless claims to the number of claims in previous years. For example, the labor force has increased +45% since 1980, from 106.78 million in 1980 to 154.5 million today, an increase of more than 48 million workers.

As bad as the average 526,625 jobless claims in January might seem, we're still nowhere near the jobless claim levels of 1982 or 1991, as a percent of the labor force. In 1991, jobless claims as a percent of the labor force peaked at .3915%, which would be the equivalent today of 604,660 jobless claims. And to be equivalent to the .6067% reached in 1982, we'd have to have 937,000 claims today, or almost double our current level.